GoPro at Risk of Bankruptcy Due to Rising Costs and Declining Demand

GoPro has raised a significant alarm in a regulatory communication published on June 1. The company stated that there is a "substantial doubt" about its ability to continue operating in the near future, highlighting a situation complicated by declining sales and rising production costs.

According to reports, one of the main difficulties arises from the increasing demand for memory chips destined for data centers for artificial intelligence. The strong demand for components from the AI sector is absorbing a significant share of global memory production, contributing to rising prices and making it more difficult for other tech sectors to source these materials.

GoPro's action cameras do not have internal memory and require users to purchase microSD cards separately. Although the rising prices of memory cards do not directly affect the company's production costs, they could negatively impact sales. Additionally, the processors integrated into the cameras require RAM, a component also affected by the current crisis in the sector.

The Delicate Situation of GoPro: Further Details

GoPro's position is further complicated by the increasing competition. Over the years, smartphones have significantly improved their photographic and video capabilities, partially reducing the appeal of dedicated action cameras. This is compounded by competition from companies like DJI and Insta360, which operate in broader market segments and also offer drones and stabilizers.

From a financial perspective, GoPro recorded a net loss of $432.3 million in 2024. The following year, the loss was reduced to $93.5 million, but sales recorded in the months of April and May showed a further slowdown.

In the documentation submitted to authorities, the company emphasized that without new sources of funding or strategic operations, its ability to continue operations could be severely compromised. GoPro also clarified that it might be forced to significantly reduce operations, restructure, or seek protection under U.S. federal bankruptcy laws.